Miner Consolidation

The Miners have been consolidating below the July – 54 day DCL for the past 3 weeks.

The drop into the August 25 day DCL caused the 10 day MA to drop steeply. Consolidating below the July DCL is allowing the 10 day MA to flatten out, which it needs to do before it can begin to turn higher Once the 10 day MA begins to turn higher, the Miners will need to break above this resistance level in order for this rally to gain traction.

Gold Finds Support

Gold printed a bullish reversal off of support on Tuesday.

The 1800 level had been a resistance level in early 2020. Now it has turned into a support level.

Gold printed a bullish reversal off of support of the 200 day MA on day 28. After crawling along the 200 day MA last week gold undercut the day 28 low. Tuesday was day 33, which places gold in its timing band for a daily cycle low. Tuesday’s bullish reversal eases the parameters for forming a swing low. A break above 1845.00 will form a swing low to signal a new daily cycle. However gold is facing triple resistance from the 200 day MA and the converging 10 day MA and the 50 day MA. No rally will be able to gain any traction until gold can close above these 3 moving averages.

Gold Delivered A Bearish Surprise

Gold broke convincingly above the declining trend line on Monday and to make it appeare that November 30th was the ICL and that gold was now beginning a daily uptrend.

Then gold was attacked at the 1962 resistance level on Wednesday and again on Friday. This caused gold to slice through the 10 day MA and the 50 day MA to close below the 200 day MA. Gold also closed below the lower daily cycle band which ends its daily uptrend and begins a daily downtrend.

This was a bearish surprise. I have no doubt this was manipulation. But the reason why this attack was so successful may lie with the dollar.

The dollar printed its lowest point on Wednesday, day 52.  That places it very deep in its timing band for a DCL.The dollar formed a swing low on Thursday and then a closed above the 10 day MA to signal the new daily cycle.

In my special report Gold v Dollar I will look at what is going on with the dollar. We will discuss the possibility that the dollar has not only formed a DCL but a yearly cycle low as well. And if so, that would spell trouble for precious metals.

This week I am offer the Special Report Gold v Dollar and a 6 week Trial Subscription Special for $15.

Your 6 week trial subscription you will give you full access to the premium site which includes:

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The 7/10/20 Weekend Report Preview

The Dollar

 
The dollar peaked on day 14. It formed a swing high and closed below the 10 day MA the next day to signal the daily cycle decline.

The dollar printed its lowest point on Thursday, day 20, placing it in the early part of its timing band for a daily cycle low. While the dollar did form a swing low on Friday, it remained contained by the declining 10 day MA. Rejection by the 10 DMA would continue the daily cycle decline. Currently, the dollar is in a daily downtrend. A break below the previous daily cycle low of 65.70 will form another failed daily cycle. And with Friday being only day 21, the dollar could trend lower for another 2 to 3 weeks before printing its daily cycle low.

Stocks

Stocks broke above the 3150 resistance level on Monday and then coiled above the resistance level this week.

This allowed the 10 day MA to catch up to price on Thursday. On Friday, stocks formed a bullish reversal and closed above the coil. Stocks formed a swing low on Friday to close at a new daily cycle high. We will use Friday’s swing to construct an accelerated daily cycle trend line. The new high on day 18 begins to shift the odds towards a right translated daily cycle formation. Which means it is likely that stocks will need one more daily cycle , following this one, to usher in the intermediate cycle decline. Stocks are in a daily uptrend. They will remain in their daily uptrend unless they close below the lower daily cycle band.

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Gold Update

Is gold ready to begin a trending move?

Gold had been contained by the 1750 resistance level for the prior 11 weeks. Gold is in position to close above 1750 resistance level on a weekly basis. A close above this resistance level is necessary for a trending move to develop. Currently, gold is in a weekly uptrend. Gold will remain in its weekly uptrend unless it closes below the lower weekly cycle band.

Gold Delivers Bullish Follow Through

Gold closed at 1753 on Friday and delivered bullish follow through on Monday.

Gold clearly broke above the 12 week resistance level on Monday. We discussed on Thursday that a weekly close above the 1750 resistance level will be our buy signal. And Monday’s rally got gold off to a good start. Keep in mind that over the past 12 weeks gold has pierced the 1750 resistance level several times, but did not hold on for a weekly close above the resistance zone. This is why we are looking for a weekly close, not a daily close, above the resistance level. Because at 14 weeks, if gold closes back below the multi week resistance zone then gold would be at risk for continuing down into an intermediate cycle decline.

Gold Buy Signal

Thursday was day 9 for the daily gold cycle. The current daily cycle high on day 4 threatens a left translated daily cycle formation. But tonight I want to look at the weekly chart.
 

This is week 13 for the intermediate gold cycle. Gold has been contained by the 1750 resistance level for 11 weeks. The 10 week MA has flatten and is at risk of turning lower. With each passing week that gold does not break above the 1750 resistance level makes it more likely that the gravitational pull from the pending intermediate cycle low will begin to pull gold lower. A close below the 10 week MA will signal the intermediate cycle decline.

What we need to see is a weekly close above the 1750 resistance level. That will be our buy signal. A weekly close above the 1750 resistance level should result in a trending move. Currently, gold is in a weekly uptrend. Gold will remain in its weekly uptrend unless it closes below the lower weekly cycle band.

Off to the Races

Back in June we looked at the Semi Conductors

We discussed how the Semi’s were poised to begin the next leg up in their bull market.

This week the Semi’s are breaking out to new highs.

The big picture is that the Semi’s had close to a 20 year consolidation. They broke above the multi year consolidation in 2017 and then crawled along that resistance level for 2 years. They have now broken out to new highs to begin the next leg up in its bull market.

This is very similar to what the Nasdaq went through.

The Nasdaq had a multi year consolidation. Once it broke above it crawled along its resistance level for 2 years before breaking higher and then it was off to the Races …

Miner Resistance

The Miners are in daily uptrend and are on day 7 of a new daily cycle which gives us bullish expectations. But the big picture is that the Miners are on week 17 of their intermediate cycle and they are running into a multi year resistance level.

A bullish break could see the Miners testing the 35 to 38 level. However, with the Miners nearing their timing band for an intermediate cycle decline, rejection from this multi year resistance level will send the Miners seeking out their intermediate cycle low.

Miner Fun

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I wanted to have a little fun looking at the Miners. So let’s begin by looking at a 12 year chart of the Miners.

miners

There are two important things that stand out to me.
1st is the support/resistance at the 150 level.
2nd is the trend line drawn off the highs prior to the 2008-09 bear market.

The 150 level was a major resistance level in 2002 and also in 2003. It was where the Miners found support in 2009. And once again as the bottomed in November, 2014.

The multi year declining trend line began at the peak just prior to the 2008 – 09 began. It was also resistance as the Miners back tested that high. The it became support in 2010 as the Miners backed tested the 200 MA as it emerged from the 2008-09 bear. It was also support at the 2013 intermediate lows.

And …

gdx short

… the recent cycle low in March.

Further discussion of the Miners and where they are in their daily, weekly, and yearly cycles can be found in the Weekend Report.

This week I am extending a Miner Special Trial Subscription offer. Try the Weekend Report for 1 month for a Miner Special of $10.

The Weekend Report discusses Dollar, Stocks, Gold, Miners, The CRB Index, & Bonds in terms of daily, weekly and yearly cycles.
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* Corn
* DBA
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* The Bullish Percentage BINGO

And I also post a mid-week update on Wednesday evenings which updates the daily charts from the Weekend Report.

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